CENTRAL PROCESSING SCHEME

Scheme

The Government of India on the recommendations of Business Process Re-engineering Committee approved (February 2009) establishment of Centralized Processing Centre (‘CPC’ for short) for bulk processing of income tax returns at a total project cost of Rs. 255 crore. The Finance Act, 2008 amended the Income Tax Act, 1961 (the Act) by inserting a sub-section 1A under Section 143 empowering the Central Board of Direct Taxes (the Board) to make a scheme for centralized processing of income tax returns with a view to expeditiously determining the tax payable by, or the refund due to the assessee. Accordingly, Income Tax Department established CPC in Bengaluru for centralized processing of income tax returns received through e-filing website and paper returns at Karnataka and Goa.

The Board vide Notification No. S.O. 16(E), dated 04.01.2012, specified a scheme called as ‘the Centralized Processing of Returns Scheme, 2011’ (Scheme for short). The said scheme came into effect from 01.04.2012.

CPC

The Board may set up as many CPCs as it may deem necessary and specify their respective jurisdictions. The processing of the returns shall be undertaken at the CPC.  Presently, CPC in Bangalore is responsible for carrying out all primary assessments.

Scope

The scope of the scheme shall be applicable in cases where return of income has been furnished in, -

(i) electronic form; or

(ii) paper form, in case of a class or classes of persons, as notified by the Board in this behalf.

Acknowledgement of return by CPC

A return of income may be filed electronically with digital signature or without digital signature. In case of return filed electronic with digital signature an acknowledgement will be generated by the server of CPC and made available in the income tax filing site which can be downloaded in printable format. This acknowledgement shall contain the acknowledgement and number and date of transmission.

In the other case an acknowledgement in Form ITR-V as provided under Rule 12 will be generated by the server of CPC. This form shall also contain the acknowledgement number of the electronic transmission and the date of transmission as an evidence of filing of the return. A copy of ITR-V shall be downloaded and after taking a printout of such a form, it shall be physically verified under the signature of the person and forwarded to the Centre. The said form shall, either through ordinary or speed post, within such period of uploading the electronically filed return as may be specified by the Director General in this behalf to the address ‘Centralized Processing Centre, Income Tax Department, Bengaluru - 560500, Karnataka.’  The date of transmitting the data electronically shall be the date of furnishing the return if the Form ITR-V is furnished in the prescribed manner and within the period specified. The Commissioner may, in order to avoid hardship in a case or class of cases, condone the delay in receipt of Form ITR-V

Rejection of ITR-V

If the ITR-V is rejected on account of it being unsigned, illegible, mutilated, bad quality or not as per specification.  it shall be deemed that the return in respect of which the Form ITR-V has been filed was never furnished. The concerned assessee shall electronically file the return of income again followed by submission of the new Form ITR-V.

The Commissioner may call for fresh Form ITR-V in special circumstances, where the Form ITR V earlier submitted cannot be considered for technical reasons.

Revised return

The revised return shall be filed through electronic mode only if the original return has been filed electronically.  The Centre will process only the revised return and no further action will be taken on the original return if it has not already been processed.

Invalid/Defective return

The Commissioner may declared an income tax return as invalid for non-compliance of procedure for using any software not validated and approved by the Director General.  An Income Tax Return may be declared invalid under Section 139 (9) of the Act on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.  The Centre shall intimate this to the person through email or by placing a suitable communication on the e-filing website if the return was declared as invalid.  A person may comply with the notice regarding defective return by uploading the rectified return within the period of time mentioned in the notice. If there is any delay the Commissioner may condone the delay. If no response is received from the person in reply to the notice of defective return, the Commissioner may declare a return as not having been uploaded at all or process the return on the basis of information available.

Processing of returns

The Centre shall process a valid return of income in the following manner,-

• the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source, Tax Deducted at Source and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported through authorized banks in accordance with the procedures adopted by the Centre in this regard.
• an intimation shall be generated electronically and sent to the person by e-mail specifying the sum determined to be payable by, or the amount of the refund due to, the person; and
• any intimation to the person to pay any sum determined to be payable shall be deemed to be a notice of demand as per the provisions of section 156 of the Act and all other provisions of the Act shall be applicable accordingly.

The Commissioner may adopt such procedure for processing the returns and also decide the priority of the same.  If the return could not be processed by CPC, the Commissioner shall arrange to transmit such return to the Assessing Officer having jurisdiction for processing.

Rectification of mistake

The CPC, on its own motion, or on receiving an application from the assessee, with a view to rectify the mistake apparent on the record, may amend any order or intimation passed or sent by it under the provisions of the Act. If the rectification order results in a demand of tax, the order under section 154 of the Act passed by the CPC shall be deemed to be a notice of demand under section 156 of the Income-tax Act.

In case of error in processing due to an error in data entry or a software error or otherwise, resulting in excess refund being computed or reduction in demand of tax, the same will be corrected on its own by the Centre by passing a rectification order and the excess amount shall be recovered as per the provisions of the Act. In such cases , an intimation to this effect shall be sent to the person electronically by the Centre and the reply of the person has to be furnished through electronic mode only.

Adjustment of tax

The set-off of refund, if any, arising from the processing of a return, against tax remaining payable will be done by using the details of outstanding tax demand lying against the person as uploaded onto the system of the CPC by the Assessing Officer.

Appeal

Any person who is aggrieved against the above said order may file an appeal before the Commissioner of Income Tax (Appeals) having jurisdiction over the jurisdictional Assessing Officer.

No personal appearance

A person shall not be required to appear either personally or through authorized representative before the authorities at the CPC in connection with any proceedings. Written or electronic communication from such person or authorized representative in the format specified by the Centre in this respect shall be sufficient compliance of the query or clarification received from the Centre. The Centre may call for such clarification, evidence or document as may be required for the purpose of facilitating the processing of return and all such clarification, evidence or document shall be furnished electronically.

Service of notice

The service of a notice or order or any other communication by the Centre may be made by-

• by post;
• sending through emails of the concerned person;
• placing its copy in the registered electronic account of the person on the official website; or
• any of the modes mentioned in sub-section (1) of section 282 of the Act.

The date of posting of any such communication on official website, email or other electronic medium shall be deemed to be the date of service. The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it/